This dissertation examines the welfare effects of three different trade-restricting policies: antidumping duties, countervailing duties, and safeguard tariffs. Existing trade models have difficulty explaining why a national-welfare-maximizing government would want to use or why a world-welfare-maximizing organization like the WTO would want to allow the use of sector-specific import restraints. In my research I develop models in which these tariff policies can improve national or worldwide welfare.; Chapter one analyzes the welfare implications of the GATT's Agreement on Subsidies in which governments agree to cease their use of sector-specific production subsidies and offer the same subsidy to all producers in their economy. Why would governments agree to restrict their own discretion in setting domestic policies as part of a trade agreement? I show that by signing an agreement to restrict their discretion in setting domestic production subsidies, governments can better achieve their goals of maximizing domestic welfare. I conclude by showing that this agreement can be enforced with countervailing duties.; In chapters two and three, I examine the question: why might a country want two different tariff policies for responding to a sector-specific import-surge? In these chapters I argue that an importing country's choice of a tariff policy will depend on the nature of the foreign economic shock that caused the import surge. In chapter two, I focus the use of antidumping duties in response to foreign demand shocks. When firms install capacity before they learn the state of demand in exporting countries, a negative demand shock in an exporting country causes the firm in that country to “dump” its exports. I show that the antidumping policy specified in US and GATT law improves an importing country's welfare relative to free trade. In chapter three, I focus on safeguard tariffs and show that if an import surge is caused by a new foreign technology, then the welfare-improving policy is a safeguard tariff. The safeguard tariff plays multiple roles, controlling the volume of imports, accelerating technology adoption at home, and delaying technology adoption in other countries.
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